China Could Cut Growth Forecast to 7%

China’s top leadership will meet on Tuesday for an annual gathering to map out economic and reform plans for the following year, and some influential advisers to the government are recommending it cuts its 2015 growth target to seven percent.

China looks set to miss its growth target this year for the first time since 1999, and full-year growth is likely to be the weakest in 24 years. The government last cut its annual growth target in 2012, to 7.5 percent from eight percent that it had kept for eight years.

Sources said government-run think-tanks, which are influential in the decision-making process but do not wield power themselves, are planning to recommend Beijing reduce its official GDP growth target in 2015 to seven percent, down from 7.5 percent this year.

“President Xi (Jinping) has already hinted at the growth target when he said growth of seven percent is the highest in the world,” said a senior economist at the Chinese Academy of Social Sciences (CASS), who declined to be identified.

“I think it should be seven percent if there are no more surprises. But it cannot be lower than seven percent, otherwise there could be employment problems and debt default problems.”

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Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.

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